Plotkin v. Republic-Franklin Ins. Co.

• Decision Date: 13 November 2019
• Docket Number: Index No. 3359/11,2016–04231
• Citation: 113 N.Y.S.3d 133,177 A.D.3d 790
• Parties: Chaya PLOTKIN, Respondent, v. REPUBLIC–FRANKLIN INSURANCE COMPANY, et al., Appellants.
• Court: New York Supreme Court — Appellate Division

177 A.D.3d 790
113 N.Y.S.3d 133

Chaya PLOTKIN, Respondent,
v.
REPUBLIC–FRANKLIN INSURANCE COMPANY, et al., Appellants.

2016–04231
Index No. 3359/11

Supreme Court, Appellate Division, Second Department, New York.

Argued—September 27, 2019
November 13, 2019

113 N.Y.S.3d 135

Lester Schwab Katz & Dwyer, LLP, New York, N.Y. (Eric A. Portuguese, Aaron Brouk, and Daniel S. Kotler of counsel), for appellants.

Shayne, Dachs, Sauer & Dachs, LLP, Mineola, N.Y. (Jonathan A. Dachs and Robert I. Gruber of counsel), for respondent.

WILLIAM F. MASTRO, J.P., CHERYL E. CHAMBERS, JOHN M. LEVENTHAL, LINDA CHRISTOPHER, JJ.

DECISION & ORDER

177 A.D.3d 790

In an action pursuant to Insurance Law § 3420(a)(2) to recover the amount of an unsatisfied judgment against the defendants' insured, the defendants appeal from an order of the Supreme Court, Kings County (Bernadette Bayne, J.), dated March 23, 2016. The order, insofar as appealed from, granted those branches of the plaintiff's motion which were for summary judgment dismissing the first and fourteenth affirmative defenses in the defendants' answer.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, those branches of the plaintiff's motion which were for summary judgment dismissing the first and fourteenth affirmative defenses in the defendants' answer are denied, and, upon searching the record, the defendants are awarded summary judgment dismissing the complaint.

The plaintiff was employed by American Pack Systems, Inc. (hereinafter APS), until her employment was terminated by its alleged owner, Israel Braun, on February 10, 2008. Thereafter, on February 17, 2008, and February 18, 2008, Braun allegedly sexually assaulted the plaintiff. At the time of the alleged acts,

177 A.D.3d 791

APS was insured under a business protection program policy issued by the defendant Republic–Franklin Insurance Company (hereinafter Republic–Franklin), with coverage of $1,000,000 per occurrence, and under a commercial liability umbrella policy issued by the defendant Utica Mutual Insurance Company (hereinafter Utica Mutual), with $5,000,000 in coverage, for the period September 29, 2007, through September 29, 2008.

By letter dated October 31, 2008, the plaintiff's counsel sent Braun a copy of a summons and complaint against him and APS based on the conduct allegedly perpetrated against the plaintiff. The plaintiff's counsel gave Braun an opportunity to seek to resolve the matter before the summons and complaint were filed and served.

In January 2009, the plaintiff commenced an action entitled Plotkin v. Braun, under Index No. 2333/09, in the Supreme Court, Kings County (hereinafter

113 N.Y.S.3d 136

the underlying action). The plaintiff asserted nine causes of action sounding in, inter alia, assault, battery, false imprisonment, and sexual misconduct against Braun, and negligent hiring, supervision, and training against APS. The plaintiff also alleged that APS was vicariously liable for Braun's actions.

On February 12, 2009, Utica National Insurance Group, which handled claims on behalf of Republic–Franklin and Utica Mutual (hereinafter together the insurers), received its first notice regarding the plaintiff's allegations against Braun and APS. On Friday, March 13, 2009, following an investigation, the insurers issued disclaimer letters, which were faxed to APS's counsel, and mailed to Braun's and the plaintiff's counsel, on Monday, March 16, 2009.

Thereafter, in December 2010, Braun and APS settled the underlying action with the plaintiff for $3,250,000. A judgment was entered on December 22, 2010.

By the filing of a summons and complaint on February 14, 2011, the plaintiff commenced this action against the insurers to recover the $3.25 million judgment. The insurers served an answer dated March 16, 2011, in which they asserted 14 affirmative defenses. By notice of motion dated May 14, 2012, the plaintiff moved for summary judgment dismissing nine of the affirmative defenses, including the first, which alleged that the complaint failed to state a cause of action, and the fourteenth, which alleged that there was no coverage based on the disclaimer.

In an order dated March 23, 2016, the Supreme Court, inter alia, granted the plaintiff's motion. The defendants appeal

177 A.D.3d 792

from so much of the order as granted those branches of the plaintiff's motion which were for summary judgment dismissing the first and fourteenth affirmative defenses.

Where an insurance policy requires that notice of an occurrence be given "as soon as practicable," notice must be given within a reasonable time in view of all of the facts and circumstances (see Great Canal Realty Corp. v. Seneca Ins. Co., Inc., 5 N.Y.3d 742, 743, 800 N.Y.S.2d 521, 833 N.E.2d 1196 ; Aspen Ins. UK Ltd. v. Nieto, 137 A.D.3d 720, 720, 27 N.Y.S.3d 52 ; Ponok Realty Corp. v. United Natl. Specialty Ins. Co., 69 A.D.3d 596, 597, 893 N.Y.S.2d 125 ). "The insured's failure to satisfy the notice requirement constitutes ‘a failure to comply with a condition precedent which, as a matter of law, vitiates the contract’ " ( Great Canal Realty Corp. v. Seneca Ins. Co., Inc., 5 N.Y.3d at 743, 800 N.Y.S.2d 521, 833 N.E.2d 1196, quoting Argo Corp. v. Greater N.Y. Mut. Ins. Co., 4 N.Y.3d 332, 339, 794 N.Y.S.2d 704, 827 N.E.2d 762 ; see Sputnik Rest. Corp. v. United Natl. Ins. Co., 62 A.D.3d 689, 689, 878 N.Y.S.2d 428 ).

Here, the plaintiff contends that notice was timely given to the insurers after APS received the summons and complaint on January 29, 2009, and that Braun's...